How Tax Preparers Make Money in the Gig Economy

Strategies for Tax Preparers to Generate Income Year-Round

Introduction

From December through April, tax preparers experience a busy season. However, work dwindles during the rest of the year. How can tax preparers sustain their income during the off-season in the gig economy?

What is the “Gig Economy”?

The "gig economy" refers to a labor market characterized by short-term contracts and freelance work instead of permanent jobs. According to the U.S. Bureau of Labor Statistics, it involves self-employment and short-term projects across various industries, including:

• Tax preparers
• Web designers
• Painters
• Technical writers
• Credit repair specialists

Benefits of the Gig Economy:

• Flexibility: Control over your schedule.
• Variety: Diverse work opportunities.
• Freedom: Independence from traditional job constraints.

As a tax preparer, you may enjoy these benefits during tax season but struggle to find work for the rest of the year.

The gig economy is growing and is expected to become more prevalent.

Tax Preparation and Side Gigs

To increase your tax preparer salary, consider adding more gigs to your professional repertoire. Leveraging your experience with project-based work and your existing client base, you can find various side jobs to sustain your income during the slow season.

Potential Side Gigs:

• Bookkeeping and payroll services
• Financial advising
• Data entry
• Credit repair services

Offering more services to your clients can strengthen your relationships and make you their go-to resource. Learn more about building positive client relationships.

When Side Gigs Outgrow Themselves

Many entrepreneurs start side jobs for extra revenue, which can sometimes turn into their primary income source.

Comparing Earnings:

• Tax Preparation: The average cost for a professional to prepare a basic 1040 tax return with itemized deductions is $261. This is usually a one-time fee per year.
• Credit Repair: Typical fees are $80-$100 per month per client. Although this seems low compared to tax preparation fees, the recurring monthly fees provide a consistent income.

Example:

• Stephanie Black, a loan officer, transitioned into a lucrative credit repair business after realizing the income potential. Read more about her story.

The Benefits of Recurring Revenue

Credit repair services offer recurring monthly fees, which can significantly increase your yearly salary. By helping clients improve their credit scores, you add value to their lives and build long-term relationships.

Advantages:

• Increased Income: Recurring fees provide steady revenue throughout the year.
• Client Value: Improved credit scores can help clients save money or secure loans.

Career Shift:

• As your credit repair business grows, you may consider focusing on it full-time, similar to Stephanie Black’s successful transition.

Learn More: Discover why tax preparers are starting credit repair businesses here.

By diversifying your services and leveraging your financial expertise, you can sustain your income year-round and build a thriving business.